Elevator Pitch: eDivvy

eDivvy helps people buy group gifts online. Can it get investors to pitch in $1.5 million?

As told to April Joyner

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The Pitch: "Group gifts are popular for occasions such as weddings and office parties, but organizing them can be a hassle. Our application allows shoppers to easily split the cost of gifts with friends, family, and co-workers. On our site, users can select gifts to buy from retailers such as Target and Macy's and invite others to contribute. We collect the money from each participant and send it to the retailer once we receive the total amount. We have also begun to partner with retailers to integrate eDivvy into their sites. By having our application on their checkout page, retailers receive traffic from each person chipping in instead of only the organizer, which increases their customer base. Soon, retailers will be able to advertise on our site, and we're working on integrating our group gift invitations with Facebook and mobile applications."

PRESIDENT: Eden Clark

LOCATION: Irvine, California

EMPLOYEES: 11

LAUNCHED: Spring 2009

2009 REVENUE: $52,000

2010 PROJECTED REVENUE: $1.1 million

2010 PROJECTED NUMBER OF GROUP GIFT PURCHASES: 35,000

AVERAGE GROUP SIZE: Eight

FEE FOR SHOPPERS: Four percent of every group purchase, plus 49 cents per credit card transaction

FEE FOR RETAILERS: Five percent to 15 percent of each group purchase

FUNDING SOUGHT: $1.5 million

The Investors Weigh In

Partner Up

I like this company's product -- it's something that I would use. But this is a crowded space, and there aren't high barriers to entry. Even large retailers like Best Buy are putting their own spin on the concept. eDivvy needs to focus on building creative partnerships. I think Evite would be a natural fit, because it attracts people organizing group events. The company should also look at retailers that fit well with the theme of group purchases. A site like Diapers.com, for example, would attract people who hold baby showers.

Organizing group gifts is one of those things in life that are begging for something to make them more efficient. This business could be an elegant solution. I am not sure how realistic the revenue streams eDivvy has identified are, however. It will be important to evaluate whether customers are prepared to pay the level of fees eDivvy is charging. I think that if eDivvy can create other revenue streams through sponsorships and joint ventures with retailers, then that will make the company more attractive to investors.

Loretta McCarthyManaging directorGolden SeedsNew York City

Is There Enough Demand?

The idea of group buying is a good one, and it has proven to be reasonably successful, most notably with Groupon, which offers group discounts. But eDivvy addresses groups of related people buying a single gift for occasions such as weddings and baptisms. Those events happen relatively infrequently in people's lives, whereas someone is more likely to seek group discounts for personal purchases. I doubt this is a big enough market opportunity for venture capitalists, although it might be one for an angel or seed-stage investor.